Nov. 23 (Bloomberg) -- U.S. stocks rose, breaking a three- day losing streak for the Standard & Poor’s 500 Index, as sales of existing homes climbed more than forecast and speculation grew that the Federal Reserve will keep interest rates at a record low.

Schlumberger Ltd. rose 2 percent as Credit Suisse Group AG recommended shares of the world’s largest oilfield-services provider. Newmont Mining Corp. jumped 2.1 percent, rising to the highest level since July 2008, as gold rallied to a record $1,174 an ounce. Goldman Sachs Group Inc. added 1.2 percent on higher profit estimates at Sanford C. Bernstein & Co.

The S&P 500 rallied 1.4 percent to 1,106.24 at 4 p.m. in New York. The Dow Jones Industrial Average climbed 132.79 points, or 1.3 percent, to 10,450.95, the highest level since October 2008. The Russell 2000 Index of small companies added 1.7 percent. The Dollar Index lost 0.7 percent to 75.11.

“It’s the end of the worldwide recession, and investors are recognizing that,” said Jack Ablin, Chicago-based chief investment officer of Harris Private Bank, which oversees about $50 billion. “It’s a very favorable environment to take risk, and that could push stocks even higher.”

The S&P 500 has soared 63 percent from a 12-year low on March 9. Stocks slipped last week as a worsening outlook for technology company earnings added to concern the eight-month rally in equities outpaced the prospects for economic growth.

Home Sales Surge

Equities extended gains after the National Association of Realtors said sales of existing U.S. homes increased 10.1 percent in October, beating the median economist forecast of 2.3 percent growth and reaching the highest level since February 2007. U.S. gross domestic product may expand 2.6 percent in 2010, according to the median of 63 economist estimates compiled by Bloomberg, after increasing at a 3.5 percent rate in the third quarter of 2009 following a year of contraction.

“Housing is showing a strong rebound,” said Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, which manages $2.8 billion. “Prices aren’t recovering as strongly yet, but an increase in sales is the first step, so that’s the first positive.”

The stock market also rose after Charles Evans, president of the Federal Reserve Bank of Chicago, told the Financial Times that U.S. interest rates may stay near zero until “late 2010, perhaps later in terms of 2011.” The Fed cut its target for the overnight lending rate between banks to as low as zero in December.

Oil Exploration

Schlumberger added 2 percent to $64.63 as Credit Suisse raised its rating on the stock to “outperform” from “neutral,” citing a “more favorable tone on international and exploration spending” for oil companies in 2010 and cost savings.

Newmont Mining Corp., the biggest U.S. gold producer, added 2.1 percent to $53.34 as bullion jumped to a record in London and New York following the dollar’s decline.

“It doesn’t hurt stocks that you have another day of pressure on the dollar, which suggests the risk-on trade is certainly there,” said Craig Peckham, equity trading strategist at New York-based Jefferies & Co.

Goldman Sachs Group Inc. helped lead financial shares in the S&P 500 to a 1.5 percent gain, as the most profitable firm in Wall Street history added 1.2 percent to $172. The company’s fourth-quarter earnings-per-share estimate was raised 15 percent by Sanford C. Bernstein analyst Brad Hintz, who said he expects the firm to reduce its compensation expense.

AT&T, IPhone

AT&T Inc. helped push telecommunication shares to the biggest gain among 10 industries in the S&P 500, adding 2.9 percent to $26.78. The telephone company may be undervalued amid concern its exclusive contract for Apple Inc.’s iPhone in the U.S. may expire next year, Barron’s reported, citing Sergey Dluzhevskiy, an analyst at Gabelli & Co.

Bank of America Corp.’s David Bianco increased his estimates for 2009 through 2011 profits among companies in the S&P 500, and raised his 12-month estimate for the equity benchmark to 1,275 from 1,200. Anticipated improvement in the financial, energy and technology sectors “are about equally responsible” for the raise, analysts led by chief U.S. equity strategist Bianco wrote in a report.

Deere & Co. gained 2 percent to $51.85. The largest maker of agricultural equipment was raised to “overweight” from “equal-weight” at Morgan Stanley.

“Demand for U.S. farm equipment is growing as customers add acreage, a secular phenomenon that is widely underestimated,” Morgan Stanley analysts wrote in a report. The analysts also cited higher corn prices in 2010 and “the potential for recovery in Brazil.”

Zions Bancorporation surged 13 percent to $14.12 for the biggest gain in the S&P 500. Utah’s largest lender said it will reduce the value of deferred tax assets and offer to exchange preferred shares for common.

To contact the reporters on this story: Sapna Maheshwari in New York at smaheshwar11@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net.

Last Updated: November 23, 2009 16:07 EST